Trump cuts subsidies for US clean energy, bringing an end to the boom.

Bila Solar, a Singapore-based manufacturer of solar panels, has suspended plans to double the capacity of its new Indianapolis factory. Heliene, a Canadian competitor, is reviewing its plans to build a solar-cell facility in Minnesota. NorSun, a Norwegian manufacturer of solar wafers, is evaluating the feasibility of a planned facility in Tulsa. Two offshore wind farms that are fully permitted in the U.S. Northeast could never be built.

The major clean energy investments are now under question, after Republicans agreed to end U.S. subsides for solar and winds power in their budget megabill earlier this month. And the White House has directed agencies to tighten up the rules as to who can claim any remaining incentives.

The U-turn in policy since the return of President Donald Trump to office will, according to project developers, manufacturers, and analysts, result in a reduction of renewable energy installations over the next decade, as well as a loss of investment and jobs within the clean energy manufacturing industry that supports them. It will also worsen the looming U.S. energy supply crisis, due to the expansion and energy-hungry AI-based infrastructure.

The moves could result in solar and wind installations being 17% to 20% lower than originally forecasted over the next decade, according to Wood Mackenzie. They also warned that the lack of new supplies may slow down the expansion of data centres needed to support AI.

The energy researcher Rhodium said that the law put at risk $263 Billion of wind, storage, and solar facilities, as well as $110 Billion of manufacturing investments announced to support them. The law will also raise industrial energy costs up to $11 Billion in 2035.

Ben King, director of Rhodium's Energy and Climate practice, said that "one of the stated goals of the administration was to reduce costs, and we have demonstrated that this bill does not do that." He said the policy was "not a recipe for the continued dominance by the U.S. AI Industry."

The White House has not responded to a comment request.

The Trump administration defended their decision to stop supporting clean energy, claiming that the rapid adoption and use of solar and winds power had created grid instability and increased consumer prices. These assertions are denied by the industry but do not hold true in grids with a high renewables content like Texas' ERCOT.

Representatives of the power industry, however, said that all new generation projects, whether they are powered by fossil fuels or renewables, should be encouraged in order to meet the rising demand for electricity in the United States.

ICF, a consulting firm, projects that U.S. electric demand will increase by 25% by 2030. This is due to increased AI and cloud computing. It's a major challenge after decades of stagnation for the power sector. The REPEAT Project is a partnership between Princeton University and Evolved energy Research that projects an annual increase of 2% in electricity demand.

According to the REPEAT Project, a policy shift that results in a tighter supply of electricity could result in a $280 increase per year for household electricity prices by 2035.

The new law has a key provision that accelerates the phase-out of tax credits of 30% for wind and solar power projects. Projects must begin construction in a year, or be put into service by 2027 for them to qualify. Prior to this, the credits were valid until 2032.

Now, some developers are rushing to complete projects while U.S. incentives remain available. Developers said that even this strategy is now risky.

After signing the bill, Trump instructed the Treasury Department that it should review the definition of the term "beginning construction". A revision could change a longstanding practice which allowed developers to claim tax credits for four years after they spent just 5% on project costs. Treasury had 45 days to create new rules.

Martin Pochtaruk is the CEO of Heliene. He said, "With so many moving pieces, financing projects and financing manufacturing are difficult, if they're not impossible." "You're looking for the next baseball bat to hit you in the head."

About Face

Pochtaruk stated in an earlier interview that Heliene’s planned cell plant, which could cost up to $350 million depending on its capacity and employ over 600 workers, was also in limbo.

The company wants to know more about the impact of Trump's new tariffs on U.S. imports and what it will mean for U.S. companies.

Trade policy

Solar industry will be affected.

Pochtaruk stated, "We have an entire building waiting anxiously for us to take a decision."

Mick McDaniel said that "a troubling degree of uncertainty" had put on hold the $20 million expansion of an Indianapolis factory Bila Solar opened this year, which would have created an additional 75 new jobs.

NorSun has yet to assess the impact of the recent executive order and new legislation on the domestic solar manufacturing industry, said Todd Templeton. He is the director of NorSun's U.S. Division that is evaluating plans for the $620 million solar wafer plant in Tulsa.

Five solar manufacturing firms - T1 Energy Imperial Star Solar SEG Solar Solx and ES Foundry – said that they were also concerned about how the new law would impact future demand. However, they had not altered their investment plans. These policy changes have also cast doubt on the future of the pipeline of offshore projects in the United States, which heavily depend on tax credits for cost reduction. Wood Mackenzie says that projects which have not yet started construction or made final investment decisions will likely not proceed.

Two of these projects are permitted. They include the 300-megawatt US Wind project off the Maryland coast and Iberdrola’s 791 MW New England Wind project off the Massachusetts coast.

Both companies did not respond to our requests for comment.

The offshore wind advocacy group Turn Forward's executive director, Hillary Bright said: "They are ready to start construction but are now stuck in a time frame that makes it harder to take advantage the remaining tax credits." (Reporting and editing by Richard Valdmanis, Marguerita Choy and Nichola Groom)

(source: Reuters)